Potential probe into Samsung C&T to be decided by state watchdog: regulator

All News 17:42 November 21, 2018

SEOUL, Nov. 21 (Yonhap) -- South Korea's financial regulator said Wednesday the authorities will make a decision on whether to open a probe into Samsung C&T Corp. regarding the alleged accounting fraud by Samsung BioLogics Co.

Choi Jong-ku, chairman of the Financial Services Commission (FSC), made the remarks when asked by reporters about growing calls for an investigation into Samsung C&T, which is the biggest shareholder of the biopharmaceutical firm.

Such views were expressed after the Securities and Futures Commission under the FSC ruled last week that Samsung BioLogics intentionally violated accounting rules ahead of its initial public offering in 2016. The case has since been sent to the state prosecutor's office, while the company has denied any wrongdoing and vowed to take legal action against the ruling.

"The possible probe into Samsung C&T will be decided by the Financial Supervisory Service and the securities commission after going through due review process," Choi said.

Stressing that the commission has already made "a clear-cut decision," the chief noted that "what we now need is to watch developments of the relevant legal procedures."

Choi Jong-ku, chairman of the Financial Services Commission (Yonhap file photo)

The regulatory review centers on questions about the loss-making Samsung BioLogics' reporting of sudden profits in 2015 after changing the method of calculating the value of Samsung Bioepis, which is a joint venture with the U.S.-based Biogen Inc.

The alleged irregularities helped boost the value of Cheil Industries, and benefited Samsung Group's heir apparent, Lee Jae-yong, as Cheil Industries held a 46.3 percent stake in Samsung BioLogics and Lee was a major stakeholder in Cheil Industries at that time, according to some ruling party lawmakers and civic groups.

The merger of the two Samsung units was widely seen as a step to enhance Lee's control of Samsung Group, as his father Lee Kun-hee suffered a heart attack in 2014 and has been hospitalized ever since.